Aeon Credit Service (m) Bhd. · MYX:AEONCR
Aeon Credit Service (m) Bhd — Q4 FYE2022 Earnings Presentation
33 slides from Aeon Credit Service (m) Bhd's earnings presentation, Apr 5, 2022
Slide 1: Q4FYE2022 Results Update
Q4FYE2022 Results Update 5 April 2022
Slide 2: Disclaimer
Disclaimer This document has been prepared by AEON Credit Service (M) Berhad (“AEON Credit” or the “Company”) solely for the use at the presentation to analyst, fund managers and investors. The information contained in this document has not been independently verified. No representation or warranty,
Slide 3: Table of Contents
TABLE OF CONTENTS Financial Overview Page 4 Business & Operational Strategy Page 21 Appendix Page 27 Page 3
Slide 4: Financial Overview
yzy) AON CREDIT SERVICE FINANCIAL OVERVIEW
Slide 5: Executive Summary
Executive Summary Improving performance despite challenging landscape Challenges Actions Taken Results ▪ Receivables rebounded in Q4FYE2022 by ▪ Reignited various sales and marketing +2.6% QoQ. campaigns upon reopening of economy. Slower loan growth and lower business activities ▪ Transaction & Fina
Slide 6: Financial Highlights
Financial Highlights Record high profitability backed by strong asset quality FYE21 FYE22 YoY (%) Revenue RM1,561.7M RM1,524.9M -2.4% PAT RM233.9M RM365.4M +56.2% Profitability ROE 13.8% 19.2% +5.4% Transaction & Financing Volume RM4.2B RM4.8B +12.8% Gross Financing Receivables RM10.1B RM9.9B -2.2%
Slide 7: Income Statement – FYE22
Income Statement – FYE22 Outstanding earnings growth amid bumpy year, elevated by prudent approach in assessing financing portfolios Total Transaction & Financing Volume (RM mil) Revenue (RM mil) YoY +12.8% YoY -2.4% 6,381.0 1,650.0 1,598.8 1,561.7 7,000.000 6,000.000 4,768.6 1,600.0 1,524.9 4,228.8
Slide 8: Income Statement – Q4FYE22
Income Statement – Q4FYE22 Transaction & Financing Volume grew, while Q4 earnings was impacted by higher impairment loss Total Transaction & Financing Volume (RM mil) Revenue (RM mil) YoY +15.8% QoQ +23.1% YoY -10.7% QoQ -3.6% 1,600.000 1,408.1 1,463.4 500.0 1,263.4 1,188.3 1,400.000 450.0 406.3 411
Slide 9: Shareholder Value & Capital Management
Shareholder Value & Capital Management Strong capital position providing ample headroom for growth Gross Receivables (RM mil) Return On Asset (%) YoY -2.2% QoQ +2.6% YoY +1.3% QoQ -0.9% 10,200.000 10,078.2 10,058.4 7.000 6.3 10,100.000 6.000 10,000.000 9,857.4 5.000 4.6 4.5 9,900.000 4.000 3.6 9,625
Slide 10: Total Transaction & Financing Volume – FYE22
Total Transaction & Financing Volume – FYE22 Overall volume improved YoY; Motorcycle Financing affected by supply chain disruption 26.5% 33.3% 27.2% 22.9% 21.1% 13.4% 34.9% 30.5% 10.2% 28.6% 15.0% 9.7% FYE20 FYE21 5.1% FYE22 6.9% 5.4% 3.5% 1.4% 3.9% 0.2% 0.1% 0.1% Volume (RM mil) FYE20 FYE21 FYE22 Y
Slide 11: Total Transaction & Financing Volume – Q4FYE22
Total Transaction & Financing Volume – Q4FYE22 Gradually grew QoQ for the past consecutive 3 quarters underpinned by opening of economic activities and intensive marketing activities 29.5% 31.8% 27.2% 16.7% 28.4% 18.8% 32.9% 8.9% 29.1% 10.5% 11.1% Q4 Q3 24.1% Q4 FYE21 5.6% FYE22 8.1% 5.7% FYE22 4.3%
Slide 12: Total Financing Receivables
Total Financing Receivables Receivables growth momentum picked up in Q4FYE22; Motorcycle, Auto and Personal Financing remain as top 3 contributors 28.5% 28.2% 27.8% 25.6% 25.2% 26.1% 34.6% 35.3% 34.8% Q4 8.0% Q3 7.5% Q4 7.3% FYE21 2.9% FYE22 3.6% FYE22 3.8% 0.4% 0.2% 0.2% Volume (RM mil) Q4 FYE21 Q1
Slide 13: Q4FYE22 Negative Pointers
Q4FYE22 Negative Pointers Steadily manoeuvring from unanticipated headwinds Dec 2021 Jan 2022 Feb 2022 Staff Productivity 50% of Dec 2021 50% of Jan 2022 Flood impact Cessation of Government aid Shorter working days in February 2022 Affected customers livelihood and having Weaker consumer spending b
Slide 14: Receivables Collection
Receivables Collection Weaker collection performance overwhelmed by turbulent external factors; normalisation expected in line with recovery in disposable income and improved market sentiment 120.0 Receivables Collection Trend 110.0 98.1 97.9 98.0 98.1 98.6 96.9 98.2 98.3 97.8 98.5 96.8 100.0 95.6 8
Slide 15: Non-Performing Loan (NPL)
Non-Performing Loan (NPL) Higher NPL attributed to lower collection activities NPL Trend NPL Trend 12000.0 2.66 3 2.46 2.24 2.5 11000.0 1.92 1.75 1.75 2 10000.0 1.5 9000.0 1 0.5 8000.0 0 7000.0 -0.5 -1 6000.0 -1.5 10,395 10,078 10,058 9,625 9,605 9,857 5000.0 -2 Q4 Q4 Q1 Q2 Q3 Q4 FYE20 FYE21 FYE22 F
Slide 16: Net Credit Cost (NCC)
Net Credit Cost (NCC) Higher NCC QoQ attributable to higher impairment loss and lower bad debt recovered NCC Trend NCC Trend 4.72% 4.97% 180 2.35% 3.04% 5.00% 2.01% 3.00% 3.74% 0.92% 130 3.41% 1.47% 1.00% 0.80% 0.42% -1.00% 80 -0.81% -3.00% -5.00% 30 -7.00% 51 24 60 116 -9.00% -9 -20 -20 -11.00% Q4
Slide 17: Impairment Loss (IL) Analysis
Impairment Loss (IL) Analysis Higher IL QoQ due to lower collections and higher management overlay 409% 410% Higher Expected Credit Loss 255.000 346% 339% 343% (ECL) provision: 205.000 289% 155.000 Specific provision from ECL 66 model of RM24.2 mil due to 105.000 19 158 higher existing delinquent 14
Slide 18: Cost-to-Income Ratio (CIR)
Cost-to-Income Ratio (CIR) Higher FYE22 operating expenses attributed to higher personnel cost Q4 Q4 RM mil YoY FYE21 FYE22 YoY FYE21 FYE22 Total Operating Income 453.2 406.1 -10.4% 1,707.0 1,706.2 0.0% Personnel Expenses 58.6 63.9 9.2% 198.0 226.8 14.6% Advertisement & Promotion 8.4 7.3 -12.8% 45.9
Slide 19: Dividend
Dividend Consistently paying out >30% of PAT to our valued shareholders Historical Dividend Data 500.0 34.0% 33.9% 31.5% 31.5% 31.9% 3 400.0 Announcement Date 3 5 Apr 2022 300.0 2 Entitlement Date 200.0 2 1 July 2022 100.0 1 102.2 300.1 111.9 354.6 91.9 292.0 74.6 234.0 123.8 365.4 - 1 FYE18 FYE19 F
Slide 20: Sustainability Activities - Q4 2022
Sustainability Activities - Q4 2022 Social welfare and corporate social responsibility activities MAF AEONBantu Post-Flood Relief Mangrove Trees Planted in Lemaás Forest Blood Donation with Sarawak General Taman Sri Muda, Selangor Reserve Kota Belud Sabah Hospital AEON Credit Junior Badminton AEON C
Slide 21: Business & Operational Strategy
BUSINESS & OPERATIONAL STRATEGY Page 21
Slide 22: Prospects
Prospects Sustainable and resilient economic outlook ahead; BNM projected 2022 GDP growth of 5.3% – 6.3% Full upliftment of containment measures • Reduce unclaimed sales (Motor Financing, Auto Financing and Objective Financing) and increase earnings visibility. Lead to increase in business activitie
Slide 23: FYE2023 Sales Growth Strategy
FYE2023 Sales Growth Strategy Capturing more sales and market share Credit Card Easy Payment • Strengthen collaboration with • Enhance merchant management and increase merchant base via AEON Retail and card collaboration and incentive reward scheme features. • Utilising external credit assessment to
Slide 24: FYE2023 Roadmap
FYE2023 Roadmap To become a leading fintech company that offers greater efficiency and convenience to our customers Digital Transform business Super App ESG Initiatives On-boarding structure Increase fee based Enhancing corporate End-to-end digital on- Mobile App equipped with income and offer value
Slide 25: AEON Living Zone
AEON Living Zone A transcendent experience for all our customers within our ecosystem AEON loyalty program x Finance service app • Express member app with AEON point / shopping information Mobile APP • Revolving loan / pre-approved credit / card application via app • Combine with E-wallet / Complete
Slide 26: ESG Roadmap
ESG Roadmap Reorganization of the Group's sustainability strategies & ESG framework Phase 1 Phase 2 Awards & Recognitions • Establish ESG Framework & Strategy • GHG Management FYE2023 • 3 Years ESG Roadmap • GHG Scope 1 & 2 • ESG KPI & Target • Emission Report ESG Rating of 3.6 Climate Risk Framewor
Slide 27: Appendix
yzy) AON CREDIT SERVICE APPENDIX
Slide 28: Performance Highlights
Performance Highlights Q4 Q1 Q2 Q3 Q4 (RM mil) QoQ (%) YoY (%) FYE21 FYE22 YoY (%) FYE21 FYE22 FYE22 FYE22 FYE22 Total Transaction & Financing 1,263.4 1,408.1 708.8 1,188.3 1,463.4 23.1% 15.8% 4,228.8 4,768.6 12.8% Volume Credit Card 372.9 380.8 299.1 378.4 397.9 5.1% 6.7% 1,476.3 1,456.2 -1.4% Easy
Slide 29: Financial Summary
Financial Summary Q4 Q1 Q2 Q3 Q4 (RM mil) QoQ (%) YoY (%) FYE21 FYE22 FYE22 FYE22 FYE22 Credit Card 810.1 755.7 706.7 720.0 722.0 0.3% -10.9% Card Purchase 727.5 658.7 688.6 701.2 701.6 0.1% -3.6% Cash Advance 82.6 97.0 18.1 18.8 20.4 8.7% -75.3% Personal Financing 2,580.0 2,556.7 2,450.0 2,419.8 2,
Slide 30: Operating Income
Operating Income Q4 Q1 Q2 Q3 Q4 (RM mil) QoQ (%) YoY (%) FYE21 FYE22 YoY (%) FYE21 FYE22 FYE22 FYE22 FYE22 Credit Card 36.7 34.0 30.6 34.1 35.9 5.1% -2.2% 144.1 134.4 -6.7% Personal Financing 113.6 114.5 103.0 99.8 99.1 -0.7% -12.8% 447.2 416.4 -6.9% Objective Financing 16.9 17.8 17.8 18.7 17.5 -6.1
Slide 31: Total Expenses
Total Expenses Q4 Q1 Q2 Q3 Q4 (RM mil) QoQ (%) YoY (%) FYE21 FYE22 YoY (%) FYE21 FYE22 FYE22 FYE22 FYE22 Impairment Loss on 65.1 23.3 92.3 33.1 154.7 367.4% 137.5% 508.4 303.3 -40.3% Receivables Personnel Expenses 58.6 55.4 54.2 53.3 63.9 20.0% 9.2% 198.0 226.8 14.6% Advertisement & Promotion 8.4 10
Slide 32: Financial Indicators
Financial Indicators FYE19 FYE20 FYE21 FYE22 PBT (RM mil) 472.2 390.4 324.9 526.8 PAT (RM mil) 354.6 292.0 234.0 365.4 Weighted average no. of ordinary shares (Mil) 255.3 255.3 255.3 255.3 Basic EPS (RM)* 1.34 1.07 0.88 1.39 NTA per share (RM) 6.0 6.1 6.6 7.8 ROE (%)* 22.1 18.0 13.8 19.2 ROA (%)* 4.
Slide 33: Thank You!
THANK YOU! www.aeoncredit.com.my Mr Lee Kit Seong Chief Corporate Officer 03-2772 9000 leeks@aeoncredit.com.my Ms Lee Siew Tee Level 18, UOA Corporate Tower, Chief Financial Officer Avenue 10, The Vertical, stlee@aeoncredit.com.my Bangsar South City, No. 8, Jalan Kerinchi, Investor Relations Team 59
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